Arbitration is gaining popularity in liability cases

December 1, 2007

Insurers and lawmakers are promoting the use of binding arbitration agreements to help avoid the costly court system.

Insurers and lawmakers are promoting the use of binding arbitration agreements to help avoid the costly court system. In North Carolina, for example, state legislators enacted a new law that caps damages in medical malpractice cases at $1 million, as long as both parties agree to resolve the case through binding arbitration. In Florida, some physicians have decided to forgo medical malpractice insurance altogether and instead use arbitration contracts with patients.

What's the advantage? Arbitration is generally faster, resolving a case in an average of 3 to 5 days rather than the 2 weeks for a typical jury trial. In addition, arbitration proceedings are private and the outcomes confidential. It also allows attorneys to better address the complexity of a medical case, reported American Medical News (8/27/2007).

Still, some worry that arbitration takes away due process rights, as patients must agree to arbitrate without fully understanding the ramifications. To ensure that you have a good arbitration agreement with your patients, experts suggest that you: